Research and experimental ex­penses that are unrelated to the cur­rent product lines or manufacturing processes of a trade or business are, nevertheless, research and experi­mental expenditures within the meaning of section 174 of the Code.

Rev. Rul. 71-162

The taxpayer paid or incurred re­search and experimental expenditures in seeking to develop new products or processes although they were unrelated to the current product lines or manu­facturing processes of the taxpayer’s trade or business. Research and experi­mental expenditures described in sec­tion 174 of the Internal Revenue Code of 1954 and the regulations thereunder may be deducted, at the election of the taxpayer, if paid or incurred in con­nection with the taxpayer’s trade or business.

Held, research and experimental ex­penditures for new products or proc­esses, that are not related to the current product lines or manufacturing proc­esses of the taxpayer’s trade or business, are, nevertheless, research and experi­mental expenditures within the mean­ing of section 174 of the Code and the regulations thereunder. See Best Uni­versal Lock Co., Inc., et al. v. Commis­sioner, 45 T.C. 1 (1965), acquiescence, C.B. 1966-2, 4, in which it was held as to the issue in this case that the amounts expended by a taxpayer, a manufacturer and seller of locks, for research and development of products not related to locks, were research and experimental expenditures within the meaning of section 174 of the Code.